Risk Taking
February 14, 2012
The June 22, 2009 cover story of Business Week which I just reread was titled “The Risk Takers.” It featured businesses which during difficult times, instead of playing it safe, placed bets on some gutsy new strategies.
To make a point, the author used an illustration that we can relate to here in Michigan. I paraphrase:
Imagine a driver on a snowy night. If the car starts to slip, the driver’s natural instinct is to slam on the brakes and jerk the steering wheel in the opposite direction. But the laws of physics advise the opposite: laying off the brakes and steering into the turn.
The author reports that from 1985 to 2000, the average merger in an economic downturn created an 8.5 percent rise in shareholder value after two years; while the average deal in good times resulted in a 6.2 percent drop in the buyer’s share value. In other words, mergers – one of the biggest, boldest moves in business – do better in bad times than good. Much better, in fact.
It wasn’t recklessness this article was celebrating; it was risk taking – daring to be aggressive, rather than just defensive, amid a weak economy. Steering into the turn, so to speak.
Just like the winter driving analogy in the article, we who are involved in school sports in Michigan can relate to the big idea of the article because we too made some of our biggest moves at our bleakest times. The MHSAA retrenched in some ways, but the greater theme as we climbed out of our bad times of 2008 was that we made unprecedented investments in new technology.
Today MHSAA.com is the website of highest traffic and MHSAA.tv is the website with the most productions of any comparable organization in the U.S. And all of these investments in technology during those bad times have allowed us to undertake the ArbiterGame project now that will provide all member high schools the electronic tools necessary to make their tough tasks of school administration more streamlined than ever before.
FBI Tips
July 14, 2014
In a June 9, 2014 National Public Radio story about the first nine months of James B. Comey’s 10-year term as FBI director, two leadership tips emerged that may apply to all types of organizations.
The first is that since the 9/11 tragedy, the FBI has had to change from an agency created to catch bank robbers to an agency that prevents crime before it occurs.
While all comparisons pale next to 9/11, many organizations have had some kind of crisis that demonstrates dramatically that the organization must change fundamentally in order to serve its overarching purpose in a changing world.
It requires an entirely different mindset, perhaps, an entirely reordered set of priorities.
The second point raised in the interview, and very likely the key to accomplishing the first, is that the FBI is now focused on the biggest steps, not just the easiest ones. This is what Director Comey sees is necessary for the FBI to become the agency our nation needs in today’s world.
The required response to a defining-moment crisis cannot be cosmetic change, but must be almost genetic change. Hard change – a focus on deep, systemic issues, not superficial matters.
It requires an entirely different level of commitment than existed before.